Recession spreads to suburbs and beyond

In most metro areas surveyed in a new report, unemployment is growing faster in suburbs than in nearby cities.

By , Staff writer

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    Slabs for houses not yet built sit idle in a housing development in Gainesville, Virginia, in this file photo from March, 2009.
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For anyone who lives in a suburb, here’s a familiar sight: at least one member of a family no longer commuting to work but instead getting the kids off to school and then trolling the Internet for jobs.

A report released Thursday by the Brookings Institution finds this isn’t happening just in your neighborhood, but all around the United States in many of the top 100 metro areas.

Over the year ending in May, Brookings found that suburban areas have felt the effects of the recession just as much – if not more in some cases – than urban areas. Out of 100 metro areas, 75 saw their suburban unemployed population grow faster than those in the urban areas. The economic situation is even worse for the outer bedroom communities, known as the exurbs.

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Exurbs hardest hit

“The exurbs have been hit the hardest among suburbs,” says Elizabeth Kneebone, senior research analyst at Brookings’s Metropolitan Policy Program in Washington.

Ms. Kneebone, coauthor of the report "Landscape of Recession," says it’s useful to understand who has been affected by the recession. “There are implications for policy,” she says.

For example, Kneebone’s research finds fewer people in the suburbs applying for the Supplemental Nutrition Assistance Program (SNAP, formerly known as the Food Stamp Program). “As the SNAP data shows, we may not be equipped to deal with the growing population trying to weather the recession in the suburbs,” she says. “We have to make sure people are adequately reached by these services.”

Not like the last recession

The spreading of the recession to the suburbs marks a departure from the last recession in 2001, when more of the economic damage was in the urban core. Back then, unemployment in the cities was 1.7 percentage points higher than in the suburbs. But in this recession, the difference between city and suburban unemployment rates is less than one percentage point.

“It shows the negative impacts of the recession are affecting cities and suburbs alike,” says Kneebone.

Although every metro area is different, Kneebone says one reason that the recession stress is higher in the suburbs is because more lower-income people have moved there in recent years.

Some suburbs also have more links to the construction and real estate business. For example, in the Fort Myers-Cape Coral, Fla., area some 24 percent of jobs are related to real estate. The unemployment rate there is 12.4 percent.

Some suburbs worse off than cities

In some suburbs, the economic conditions may be even worse than the cities. That’s the case in Cincinnati. In May, the unemployment rate there was 8.8 percent, compared with 9.5 percent in the suburbs. And the rate of change was almost one full percentage point faster in the suburbs.

Kneebone says some of Cincinnati’s exurbs extending into Kentucky and Indiana are in even worse shape. The unemployment rate is as high as 11.5 percent in some counties. Despite the fact that the unemployment rate is high and rising at a faster pace than the city, however, the increase in the number of people applying for SNAP funds in the exurbs is about the same as the urban areas.

Frayed safety net

“We found that throughout the country, even though the exurbs are leading in terms of unemployment, they are lagging behind in their use of safety-net services.” Kneebone says.

There were no major surprises when they did the research, she says. In cities with bad economies, the suburbs also lagged. That’s true of such places as Detroit; Toledo, Ohio; Charlotte, N.C.; and Stockton, Calif. And in cities that are not suffering as much during the recession, their suburbs are also doing relatively well – places like Des Moines, Iowa; Omaha, Neb.; and Provo, Utah.

“Some of the hardest-hit communities are Sun Belt metros who felt the fallout of the housing-market collapse or regions dependent on the auto manufacturing industry,” she says. “Those that tended to do better had higher concentrations of jobs in more recession-proof industries, such as government or education.”

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